In Depth

Employers or their insurers - not health care providers - must prove when medical expenses for injured employees might be
considered higher than what's allowed under the state's workers' compensation statute, according to the Indiana
Court of Appeals.

In a series of rulings today that deal with injured firefighters and city workers in multiple Hoosier communities, a three-judge
appellate panel interpreted the Indiana Workers' Compensation Act and how it applies to state statutes about medical billing
disputes.

"This case requires us to review several statutes under the Act that balance the right of medical service providers
to seek payment for medical care to injured workers, against the right of employers to demand that such payments not be excessive,"
the unanimous panel wrote, turning to its own Indiana precedent as well as rulings from other state and federal courts.

The Washington case handed down June 24 dealt with medical provider Beltway Surgery Center, specifically involving
about $11,563 in billed medical care that an injured firefighter received in March 2005 after sustaining injuries on the job.
The township's workers' compensation insurer hired a billing review service as allowed by the Indiana Workers'
Compensation Act, and that service determined the surgery center was charging too much - it didn't fall below a standard
80th percentile, the maximum amount an employer's "pecuniary liability" can be for medical services under the
act. That service recommended that only about $5,104 be paid, and Beltway Surgery took the case to the compensation board
to recover the remaining unpaid amount it had billed.

The other two unpublished opinions dealt with similar issues, one involving a Michigan City employee who received care at
Memorial Hospital of South Bend, and the other an Onward Fire Department employee who received care at Clarian Health Partners.

With the lead and only published opinion of Washington, the panel unanimously determined that if an employer or
its insurer refuses to pay the full amount of a medical service provider's bill, then the employer must prove before the
Indiana Workers' Compensation Board that its pecuniary liability to that provider is less than the billed charges. The
judges also held that if an employer fails to prove how a billing review service calculated that the amount exceeded the 80th
percentile standard, then the board could order the employer to pay the full amount of the submitted bill.

"We conclude that placing the burden of proof on the employer is more consistent with Indiana law generally and with
the Act itself," the court wrote. "The 80th percentile rule is a more precise codification of the general principle
that medical bills sought to be recovered during litigation be reasonable and not be excessive."

Since employers or their insurers are allowed to hire billing review companies, then those reviewers should be capable of
offering proof as to why a billed amount might be considered excessive, the court wrote. To conclude otherwise and require
doctors or hospitals to prove why their bills aren't excessive would presume that happens more often than not and might
stop medical service providers from providing that care to injured workers, out of fear they might not get fully paid.

"The value of such assurance of payment as an incentive for medical service providers to treat injured workers under
the Act would be greatly diminished if employers, their insurers, and billing review services were permitted to make unilateral
decisions to pay providers less than the amount of their billed charges without being required to prove the validity of such
a reduction," the court wrote.

It would be up to the General Assembly to amend statute so that medical providers bear the burden of establishing that their
bills fall outside that guideline, the judges determined.

The panel affirmed each of the decisions by the Workers' Compensation Board to place the burden on employers, and award
the full amount of billed charges.

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